State Bank of India pushes digital transactions in race with private banks

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State Bank of India (SBI), the country’s top lender, is witnessing a noticeable increase in the number of digital transactions through its multiple channels. But the lender that controls a fourth of India’s total loan and deposits market, it is a long way off, amid increased competition by the private players.

SBI Chairman Dinesh Khara said in an interaction to a news agency that the percentage of digital transactions has increased to 67% now from the 60% reported during the pre-pandemic period. The bank’s digital channels have got “wider currency and acceptability” as the e-commerce picked up in the country as the spread of the pandemic has slowed down, barring a few states.

“I think it is a phenomenal number, considering the fact that we are a bank which is serving all kinds of customers – digitally savvy and not digitally savvy,” Khara told PTI.

During the pandemic and the concomitant lockdowns that restricted people’s movement, e-commerce transactions reported a steady progress from across the country. According to Khara, the ecosystem such as round-the-clock availability of Real Time Gross Settlement System (RTGS) and National Electronic Fund Transfer (NEFT), which got created recently, also helped the bank in scaling up its digital transactions.

According to the Reserve Bank of India (RBI), in February 2021 SBI handled 2.39 crore outward transactions via NEFT, amounting to Rs 2.8 lakh crore, and 6.82 crore inward transactions worth around Rs 3.55 lakh crore. In February, through RTGS, the bank managed Rs 9.27 lakh crore (inward) and Rs 10.57 lakh crore (outward).

While HDFC Bank has taken a march ahead of SBI with a much bigger market share of digital transactions, ICICI Bank is a close third, following by Axis Bank. In UPI (Unified Payments Interface) transactions, SBI comes at a distant ninth position with a meagre share of a fast-growing market, controlled by PhonePe, Google Pay and Paytm. Axis, Yes and ICICI Bank apps are ahead of SBI in UPI transactions, with Axis taking the fourth position in the whole UPI ecosystem.

Khara believes that a part of the bank’s higher digital transactions has come from the ecosystem and a part of it, from the bank’s own effort. The lender’s digital lending platform, YONO (You Only Need One) app has achieved “significant growth” during the current financial year. YONO which has over 34.5 million registered users, witnesses 9 million logins per day.

The bank has opened over 1.5 million accounts through YONO in the quarter ended December 2020 with nearly 91% of YONO eligible savings bank customers migrated on YONO. The bank is opening over 35,000-40,000 savings accounts per day with the help of the mobile app. In terms of digital lending, the bank disbursed pre-approved personal loans worth Rs5,300 crore via YONO in the third quarter.

During the current financial year, around Rs 16,000 crore worth of pre-approved personal loans were disbursed to 12.82 lakh customers through the app. While 59,000 crore car loans aggregating to around Rs 4,000 crore were sanctioned, the bank could generate 15,000 home loan leads worth Rs 4,000 crore with the help of YONO.

The platform also helps in distributing products of the bank’s subsidiaries including SBI Life Insurance, SBI General Insurance and SBI Card and SBI Mutual Fund. So far in this fiscal, close to 25 lakh personal accident policies and seven lakh life insurance policies have been issued using the YONO platform, Khara said.

SBI is constantly augmenting the infrastructure required to support an increasing number of transactions through all its digital channels. Khara said the bank’s topmost priority is to provide safety to customers using its digital channels and has significantly scaled up capabilities to deal with any kind of cyber frauds.